Aereo’s Barry Diller Disrupts the TV Establishment–Yet Again

Aereo's Barry Diller Disrupts the TV Establishment--Yet Again

Over the decades Hollywood has feared and tried to spurn most new technology — television, video cassette recorders, cable, digital video recorders, and internet access to its goodies.

The newest object of its fear is Aereo — which uses thousands of tiny individual antennas to capture and stream to subscribers free TV channels without paying retransmission fees. Aereo, which, like DVRs, allows subscribers to fast forward past commercials, won big in the Second Circuit Court of Appeals 10 days ago when the court refused to issue an injunction against it.

In response, News Corp announced on Monday that the Fox TV network might be forced to turn into Pay TV stations if Aereo survives all the court challenges to come. With that announcement, the ironies were piled high.

Barry Diller, the sly fox who is now Fox television’s chief opponent, is the executive who was responsible for the creation of Fox Broadcasting. A college dropout who started in the mailroom at William Morris, he also created the made-for-television-movie with ABC’s Movie of the Week in 1969. Not all of Diller’s gambles have paid off — he never managed to make a success of what became USA Networks — but he has always put his money where his guts tell him it should go. And, years ago, he decided that the internet was the future. His IAC/InterActive Corp now owns about 50 internet sites including Newsweek/TheDailyBeast, Ok Cupid, Match.com, Ask.com, and About.com; and he has spun off Home Shopping Network and Ticketmaster.

A major backer of Aereo, Diller has now helped raise $38 million in new funding so it can expand from New York City to 22 new cities, including Chicago, Boston, Atlanta, Philadelphia, and Washington D.C. The western United States is not included in this new expansion.

A year ago, when Aereo was launched in New York City and all the major broadcasters filed lawsuits, Diller gave one of his rare interviews. He said that he didn’t expect Aereo to be a major threat to cable companies, because people will always want to watch ESPN, but that it might well find its audience in the young people who have grown up comfortable with accessing material on the internet.

Fox may simply be blustering. But, if Fox is serious, can ABC (owned by Disney) and NBC (owned by cable behemoth Comcast) be far behind? Someday in the not all that distant future, will the era of free over-the-air television be over?